KARACHI, Jan 17: Despite pumping of Rs40 billion in just two days by the State Bank, the money market remained tight and the overnight rates kept moving at the highest level of above 8.5 per cent on Tuesday.

The market showed serious liquidity problem and the SBP made effort with Rs9.3 billion to bring a change in the tightrope movement of the money rates.

Dealers said that most of the deals were made at over 8.5 per cent despite the injection. The SBP injected Rs30.7 billion on Monday.

Market experts said there was no big inflow in near future.

The SBP has set a pre-auction target of Rs8 billion for Wednesday’s auction of treasury bills.

The experts said that outflow of Rs8 billion was expected to join the market the same day which means that the injection of Rs9.3 billion could not ease the liquidity crunch because of T-bills auction.

The SBP injected Rs30 billion for five days and Rs9.3 for four days and the maturity of these injected money would again cause sever liquidity problem.